Digesting the difficult decisions of development

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“Sorry Bilbo, I was going to take you on this *amazing adventure*, but then I checked your expenses from last year, and you seem to be spending your entire budget on food, not travelling.”

Economists can sometimes be a little sceptical of asking people what they want. If we’re trying to provide and finance a public good, for instance, we might be worried that beneficiaries will understate their value of that good to try and get away with paying less for it. Others – often those in the behavioural science camp – can be wary that people may not be reasonably informed as to what is good for them, or might let cognitive quirks and biases undermine their prioritisation.

Over at the African Can End Poverty blog, this scepticism seems to have been extended to Tanzanian businessmen, as Jacques Morisset argues that we should pay less attention to what local firms claim are policy priorities:

Allow me to illustrate. According to the entrepreneurs operating In Tanzania, electricity is their major constraint (85 per cent) followed by access to finance (52 per cent), taxes (37 per cent), and administrative red tape (25 per cent). Source: World Bank. Investment Climate Assessment, 2009. Surprisingly, labor and transports costs are only at the bottom of their concerns (less than 10 per cent). According to this ranking, the priority should be therefore given to reducing electricity costs, increasing access to finance and reducing taxation.

A closer look at the firms’ financial balance sheets provides a different picture. In reality, electricity counts for a marginal share of firms’ operating costs in Tanzania (see Figure). For example, it is equivalent to only 3 per cent for a standard firm operating in the apparel sector. In other words, a decline, say, of 50 per cent in electricity prices would only reduce its costs by 1.5 per cent – hardly a high number for such a big effort. By contrast, transport and labor costs are equivalent to 41 per cent and 38 per cent of its total operating costs. This means that reducing transport costs by only 4 per cent would achieve the same gains for the enterprise than cutting by half its energy costs.

I’m not entirely convinced by Morissets argument: he only presents data on the current breakdown of firm’s operating costs, but no evidence on how firm electricity usage might change if prices did come down. This is a little like arguing that that since poor, stunted children in a rural village only appear to consume maize, there’s little point in subsidising the cost of protein-rich foods.

Morisset admits that electricity access might be an issue, but then goes on to make his argumet based on the static view: that we should target inputs which are currently the most costly for Tanzanian firms. Perhaps this it the right course, but a difficult argument to make without more information on how firms change their behaviour when relative prices change.

Today is the last day of campaigning before Tanzania and Zanzibar go to the polls to elect a new Government. Elections in Zanzibar are extremely close-fought events, though you wouldn’t guess it to look at the results over the last forty years. The ruling party, CCM (Chama Cha Mapinduzi, The Party of the Revolution in Swahili), has held power ever since independence. The main opposition party, CUF (Civic United Front) has called foul on recent election results, and even refused to recognise the current Government due to allegations of vote rigging in 2005, a state of affairs that persisted until the two parties recently agreed to a Government of National Unity regardless of the results of the forthcoming elections. Given this fraught political relationship, the elections have been prone to violence in the past: in some cases large scale as occurred in 2005, particularly in Pemba, the CUF stronghold.

Hopes are high this year that the violence that has characterised previous elections will be avoided. CUF supporters recognise that for once, whatever happens, they will have a voice in Government thanks to the Unity Government. While this won’t eliminate their grievances overnight, it will appease them significantly if they lose another contested decision. One friend of mine summarised it as ‘tutapiga kura tu, hatupigi vita!’ – meaning ‘we will vote only; we are not waging war’. It’s a quirk of the Swahili language that to vote is kupiga kura while to make war is kupiga vita.

That said, in the last week, tension has ratcheted up. What had been a relatively subdued campaign has burst into life in the last few days. Virtually every Zanzibari is decked out in the green and yellow of CCM or the white, blue and red of CUF. Today, there are two major rallies taking place. I drove past the scene of the CUF rally this morning and the adjective that most came to my mind was volume: there were tens of thousands of participants, all making the most unimaginable noise. It wasn’t unpleasant, mind: a mixture of political sloganeering, joyous singing, beating of ngoma drums and the bleating of car horns. CCM will be holding its own rally this afternoon, and I’ve no doubt it will be similarly colourful.

Seeing such big, volatile groups surrounded by trigger happy military officers and police is a cause of concern: the army is shipped over from Mainland Tanzania, has a political affinity to the ruling party (CCM in both Tanzania and Zanzibar) and no family ties to the demonstrators – it doesn’t encourage restraint on either side. The groups of different supporters have started minor confrontations recently as well – though most of the time it has so far amounted to a few slogans or mild insults hurled at a passing truck full of political opponents.

In any case, fears of violence aren’t high for election day. The day results are announced may be a different matter, however. As I said before, CUF are likely to accept the results with something approaching equanimity since any outcomes affords them a greater political voice than they have ever enjoyed before. CCM, on the other hand, might react differently. The word in the back streets is that the rank and file of the party are far from happy that their leadership has agreed to the unity Government, and conspiracy theories abound as to the reasoning behind it – most relating to senior political figures’ desire to protect their estates. If they win the election, this probably won’t be an issue – they’ll have the President and bragging rights. If, however, CUF win for the first time, we might see some trouble.

This might happen, too. From what I gather, the voter registration process eventually completed in a relatively even-handed way. Voter registration is one of the main ways in which election rigging can occur, so this is a good sign. What’s more, the CUF leaders have responded to the good-natured joshing of a friend of mine who knows some of them with unusual confidence. Being told ‘hamtashinda safiri hii, tena!’ (‘you won’t win this time, again!’) their response has been an unusually calm ‘hujui. Wengi wamebadilika tangu 2005’ (‘you don’t know. Many have changed since 2005’).

We’ll see, though – tomorrow should be interesting. I’ll be following things via text updates from some friends doing the election monitoring and observation. I’m hopeful of a peaceful time. I’ve stocked up on wine, food and dvds, though, just in case things kick off.

Update: The Zanzibar Untold twitter feed is posting really interesting updates on rumours of electoral malpractice. It all seems to be hearsay thus far, but very interesting nonetheless.

New media is all the rage. Tanzania’s political class has been pretty excited over the last week or two by the formation of a new political party, CCJ (the name stands for Chama Cha Jamii, or Party of Society). There are a number of interesting things about this event, but one of wider interest beyond the confines of Tanzanian political discourse is their use of an innovative way of registering new party members, normally poaching them from other parties: text messaging and internet registration. The Swahili daily Nipashe ran an article about this a few days ago which I’ve only just noticed now, under the headline ‘CCJ Yazidi Kujitanua Kisiasa’ (‘CCJ are Growing and Widening Themselves Politically’). It writes:

“This strategy, unprecedented in the history of the whole of East Africa, relates to the use of news and communications technology [ICT] … as the service which allows citizens to join the party by electronic means wherever they are…”

(This and the rest of this piece is based on my translation of two pieces in Nipashe in Swahili – Swahili speaking readers can drop me an e-mail or a comment and I’ll transcribe the interesting bits so they can read in the original language).

How do they do it? Quite simple, really: mobile phones. Prospective members send a text to the number 15337 including the word ‘CCJ’, then their exact name, a star, their address, a star, their state, a star and their area. After three weeks, a registration card will be sent to the address listed. In the most amazing (and selfless) part, Richard Kiyabo, the chairman of the party in question, has said they are ready to provide technical support to other parties to teach them how to use the same system of registration.

This is a great idea, given the size of Tanzania. To sign up people in the villages and fields would require a huge investment in time either from the party (sending out activists far from the towns) or from the potential members (traveling long distances to register). Mobile phone use is very widespread here these days, and the great thing is you can just borrow someone else’s mobile to register yourself. CCJ are just a few weeks old, and this recruitment strategy is the central prong of their drive to ensure that they can participate meaningfully in the elections expected to be held in October.

That’s the technical side of things. The political implications of this new party, formed on the 2nd of March, are now becoming apparent. For those unfamiliar with Tanzanian politics, since independence and the unification of Tanzania and Zanzibar, respectively, only one party has ever ruled in either place: TANU, which became CCM after the Union. My reading is that in the mainland, CCM have had no real worries about their ability to retain power.

The arrival of CCJ didn’t seem like it would influence this much one way or another. But on March 31, Fred Mpendazoe, an MP from CCM announced his defection to the new party. By this defection, Mpendazoe (described as one of the men in CCM on the front line in the battle against corruption by the same paper) has drawn rare praise. It seems this defection is likely to cost him Tsh 45 millions (roughly $35,000) in benefits and other perks of Government membership. By foregoing all of this in order to join the new party he has made himself, and his new party, front-page news. This kind of publicity will perturb CCM, but I doubt it will change the final result at the ballots on the Mainland – but if CCJ succeeds in ‘harvesting’ more members from CCM, things could get interesting.

In Zanzibar, though, the situation is different. Zanzibar’s traditionally warring major parties, CCM and CUF have agreed on a coalition Government after the coming elections, an idea which the House of Representatives just a couple of days ago agreed to put to referendum. This worried me because with CCM and CUF joining arms in a new Governmental structure, Zanzibar would be left without any viable opposition. A complete lack of contestability in Government would be disastrous for political accountability. The remaining party, Chadema, never really seemed to me to be at the races much. The emergence of any new source of political contestability would be great: Zanzibar would enjoy the benefits of peace and better representation that the coalition Government will likely bring without losing too much of the contestability that is required for democratic politics to work.

It’s going to be an interesting few months for East African politics.

UPDATE: A reader has tried the service and found that he wasn’t asked for an exact address, as reported in the papers. It seems that the service may not be all its made out to be. He still got a membership number, though. And I imagine that boosting numbers to get on the October ballot is CCJ’s main aim, so perhaps they’re getting what they need out of it.

FURTHER UPDATE: It seems that registration safeguards on this system aren’t very strong, thanks to a bit of investigation from a reader. But the point about how this technology, once problems are ironed out, could be useful remains valid.

Since reading North of South, one aspect of Shiva Naipaul’s violent criticism of the circus of development work in Africa keeps returning to my thoughts. Naipaul argues that Africa has been so drowned in words, slogans and rhetoric that all meaning in its politics and development has been leached out of it. He gives one remarkable example, from Tanzania:

Ndugu [comrade] Kaiza threw a weary glance at me… “I will tell you frankly – ujamaa is not very interesting.”
I gazed at him in some astonishment. “Ujamaa is the foundation of the Tanzanian Revolution, Ndugu Kaiza. How can you say such a thing?”
“It is people planting. That is all. Why do you want to see people planting? If you want to find out about ujamaa, read the works of Mwalimu [Nyerere].”
“I have.”
“Then why bother to give yourself all this trouble?… People planting… that is all.”
“But what about the spirit of Socialism and Self-Reliance?”
Ndugu Kaiza stared fixedly at his pudgy hands. It was as if he had run out of ideas as to what else he could do with them. “The spirit of Socialism and Self-Reliance is there. But you cannot see it. All you will see is people planting…”

What’s so astonishing here is that this was no ruse to prevent Naipaul accessing an ujamaa village – Ndugu Kaiza went on to write him a letter of introduction He simply did not see what more there was to ujamaa than what Nyerere had written. The practice of socialism did not seem relevant to an understanding of it. Naipaul’s shock was tempered by his belief that this was the basic problem with independent Africa: too many words and not enough reality.

I have been making a less extreme version of this criticism for quite some time, and one not limited to Africa, but to all development actors. When we first started this blog, I wrote about language and in particular the emptiness of the key phrases of development discourse: sustainability, accountability, partnership. Reading Naipaul has only sharpened these criticisms and I’m beginning to believe that the problems run far deeper than they appear at first sight – and that the rhetoric of change is replacing change as the primary focus of aid organizations and Governments.

This is a cynical observation, but not a radical one. In bits and pieces this idea has been circulating for some time. For example, my ex-boss in Malawi co-authored a paper about the budget process there, entitled ‘The Budget as Theatre’ , which argued that the process of budgeting was an elaborately constructed stage on which all the right noises were made, but the actual process of rational budget allocation was completely absent.

There are other examples, too. Most countries in Africa are using Poverty Reduction Strategy Papers as their templates for development. I have no problem with this approach insofar as there are a number of interlinked problems which hamper development and some idea of how scarce resources will be allocated to address them is to be welcomed; if there a clear vision as to what should be achieved and how it may be done, it should be welcomed. Unfortunately, my experience has been that most PRSPs have fallen prey to the problem of empty rhetoric as well. The PRSP professes to lay out a plan, and suggests a set of activities that will be performed in its name, but in actuality it is little more than a paper document designed to dazzle.

‘Motivation, Lea-der-ship, I-de-ol-ogy – these are a few of my favourite things’

A lot of modern economic theory aims to provide a theoretical platform from which we can start to understand complex phenomena. Most economists recognise that a platform is still only that, and that there is a lot more to the world than it provides. This is a method that has crept into other social sciences, like sociology and political science, too; with the same caveats.

The approach has merit: it is useful for us to look for patterns in how things work, even if differences between experiences outweigh similarities. However, it can also bias the choice of the factors we analyse towards those with the most uniform properties, suitable for this kind of theorisation (the obvious counterpoint, that all research methods have biases, is true: this is why it is important to draw on research from multiple disciplines). I saw an example of this in a very interesting book I’m reading at the moment: When Things Fell Apart, by Robert H. Bates, a political scientist.

Bates is looking at state failure and conflict in late-20th Century Africa, noting an increase in incidence of civil war and predatory state behaviour. He puts forward a basic resource-based theory: essentially, state predation emerges when the discounted returns from predation on the society and seizing or stealing resource are higher than the discounted returns from taxation revenue. The theory predicts that as the time horizon of the political leaders reduces, so their tendency to predate on society should increase; similarly, if possible tax revenues fall, they will again tend towards becoming predatory.

Obviously, Bates would recognise that this is not the whole story, but his argument is that this is the basic starting point for understanding civil war. His approach is useful: resources are crucial to understand in conflict, though their role can be different in different circumstances. Yet the method can obscure understanding of other issues. To give a minor example, he writes:

I argue that ethnic diversity does not cause violence; rather, ethnicity and violence are joint products of state failure.

This kind of statement bothers me; it betrays far too rigid a conception of the world. Ethnicity is not ‘caused’ by state failure. Ethnic identities exist everywhere. Hong Kong has a dominant ethnic identity of Han Chinese, and many minority ethnic identities. I would be extremely dubious of anyone who claimed Hong Kong was a failed state. Further, in the African context, we could argue that the statement is turned upside down. It may well be far more useful to say ‘unified identity is the product of state success’. The history of African state-formation suggests that examples like Tanzania where national identity supersedes ethnic identity in many contexts are rare, because pre-existing ethnic identities were welded into states, and these identities have continued to evolve over time. On this particular point, this is just nitpicking. His analysis of ethnicity does not undermine his central argument. But I would argue that ethnicity (and identity more generally) is one of the concepts that model-based analyses struggle with, which is not to say that no models using ethnicity are worthwhile. Some other concepts I’d group in this ‘troublesome’ category for economics are leadership, ideology and motivation.

In a few days I’m leaving for Dar es Salaam, to help run the baseline survey for a “randomised land rights” project in the slums of the city. I’ll be away for about two months.

I’d welcome any general advice on living in Dar or on field work!

My posting frequently will inevitably plummet during this time. Ranil and I are going to try and arrange for some more guest posts to offset this. For more general (read: pretentious and thesaurusrific) writing on my travels, you can check the blog that I kept in Malawi: Stranger in a Strange land.

There’s a significant chance I’ll soon be going to Dar es Salaam for a few months to work on (probably) a land rights project. Aside from having spent a few days in Dar and a week in Tanzania, I know very little about the country apart from the basics. What books should I be reading (nonfiction and fiction)?

I recently posted a rambling trail of thoughts about the difficulty of state building in much of Africa. It was a generally bleak assessment: historical circumstances have made state-building difficult due in large part to the historical importance and continuing primacy of sub-national forms of identity. I also suggested that without a strong national identity and state, it’s difficult to transform the economy in the ways needed to develop rapidly.

Having said this, there are examples of countries and leaders within Africa who have explicitly pursued nation-building with some success, and its worth looking at these examples to see what kind of impact this has had on development. The two examples I am most familiar with are Malawi under Hastings ‘Kamuzu’ Banda and Tanzania under Julius Nyerere (Kenneth Kaunda also sought to rule Zambia using the ideology of ‘One Zambia, One Nation’, but I’m less familiar with the ins-and-outs of Zambian history).

What’s most interesting about these examples is how they pursued nation-building policies and why they haven’t gone on to more rapid development than the rest of Africa if state- and nation-building really is important

Nation building in Malawi and Tanzania took similar forms, but through rather different methods. Unity of state and nation was a key ideological component of Hastings Banda’s vision for Malawi in the thirty-odd years he was Life President, and he pursued it vigorously. As a national language, he selected the language spoken by the Chewa, which at the time was considered simply to be a dialect of Chinyanja. Giving it the name ‘Chichewa’, in 1968 the Government began an aggressive campaign suppressing other languages. Books published in Chitumbuka, Chiyao and Chilomwe were suppressed and banned; all instruction was given in Chichewa and English; and there was even a national ‘Chichewa Development Board’.